How can Innovation affect a companys profit

Innovation has been a buzzword for some time, but is it fully integrated in organizations strategies and goals for profit? In Denmark, witch is my point of view, it is only a handful of companies that has taken this challenge seriously, and the main reason is that their business is to deliver innovative products. But what if an ordinary service or production company, adapted some of the same methods, would this affect their profit and market position. My hypothesis is that this is an area in witch companies would discover a great development potential, so my personal opinion is yes. How can your organization get started? Well first of all you probably want to show some documentation of your companies present level of innovation. By having this baseline you can registrate new concepts and measure the development and profits. There is of course a long way from deciding to work seriously with innovation until this new work process is implemented and the results appear. The real work is to evaluate your organization and determine witch methods you should develop and follow. This part is very challenging and interesting, because you don't want to implement a method that turns out not to live up to your goals for benefit or profit. In other words, put a lot of effort into this part of the process, and most important, talk to the people who you plan should work with the new methods, those who has to deliver the goals, or maybe the most significant group, the customers.

How to set up a process:

This method is an overall example witch can lead to inspiration. But there is yet a lot of work to do for every proces.

Before you get started, analyze your companies primary products or services. Then look at the possible areas of innovation, but don’t conclude anything before your interviews with the business areas is accomplished.

Doblins 10 types of innovation.

Doblin describes 10 types of innovation. Take a closer look at these 10 areas, and keep them into consideration until it is revealed where your company can gain innovative benefits.

  1. Business Model
  2. Networks and alliances
  3. Enabling process
  4. Core processes
  5. Product performance
  6. Product system
  7. Service
  8. Channel
  9. Brand
  10. Customer experience

Here is an example of how you can plan your process:

  1. Point out your companies primary products, services and customers
  2. Compare with the strategies and goals for the organisation
  3. Analyze department profits compared to the goals
  4. Point out key areas, departments or customer segments
  5. Select a appropriate amount of people who can anticipate with an interview
  6. Make an interview guide, and prepare the chosen persons and have them consider where they can point out optimization areas. The interview guide for the organization could look like this:
  1. Name and position.
  2. Working area
  3. Years of employment. Recognize new employee’s great potential to point out optimization areas.
  4. Note the innovation areas that the interview person chooses for them selves or other people/departments. It is often easier to se other peoples problems or potential clearly.
  5. Write a conclusion

A customer interview guide:

    1. Name and position
    2. Customer use
    3. Years of application
    4. Note the innovation areas that the interview person chooses for them selves or other people/departments. It is often easier to se other peoples problems or potential clearly.
    5. Write a conclusion

    Interview the organisation

    1. Make a catalogue/report witch gathers all the answers.
    2. Now you take a look on the 10 areas and evaluate from all your answers witch area(s) you should focus on.
    3. Compare strategi and goals with your new knowledge and se if there is a relationship. If the outcome and the companies benefit doesn´t reflect your strategi and goals, maybe they should be evaluated. The result of describing and measuring goals for the chosen departments can alone have a positive impact because everyone knows what the primary focus is.
    4. Presentate the report to the decision makers, including an action plan for implementation.
    5. The decision or output from this presentation is defined in individual goals for key persons, departments or areas. Measure the results for example once a month. Establish a innovation task force that can support the goal owners with creative processes.
    6. Measure yearly output (i.e. witch new initiatives are presented to the market or organization) and optimize.
    7. Start over.

    More information on creative processes

    Notice Doblins figure. The main perception of innovation is that innovation is a new invention or a drastic change and performance of a product. The consequence of this assumption is that companies put a lot of effort into the product performance area. Analysis show that 2 % of projects, produce more than 90 % of value, and the lowest output of results is produced within product performance.

    One area that Doblin doesn’t recognize is society and organizational innovation. This is probably the easiest innovation to predict, due to history. The types and areas of development in society maybe new, but for centuries and more we have developed our social skills, way of living, how to survive and earn a living. Today the west is going from industrial production to a service oriented and knowledge based production. The service oriented production trend has been present for a while, but our organizations change, leadership evolves and peoples priorities change from money earned to value of living. The new generation witch are students at this point, will not only focus on what they can earn, but far more on how can a company contribute to my life and skills, and how flexible is the organizational framework. The framework refers to what is measured, your physical appearance or your results. Does a leader give attention to the way, or where, you decide to do your work or is it your results that counts. There isn’t a lot of organizations that dare to give free reins yet, but the wave is rolling, and the competition to attract the best employees will force this development. Until then and concurrent, analysis show there will be a larger attraction towards self-employment.